Analyst increases Las Vegas Sands price target

Aug 14, 2009 10:50 PM
Staff & Wire Reports |

An analyst boosted Las Vegas Sands Corp.'s (LVS) price target Friday after the casino operator reworked a credit agreement so that it could potentially sell a minority stake in its Macau operations to raise cash.

Thursday, the Sheldon Adelson-led Las Vegas Sands said the amended Macau facility would improve its financial flexibility.

JPMorgan's Joseph Greff said the amendment is a key step in the casino operator's efforts to bolster its liquidity.

"We believe the Macau bank group's willingness to amend the credit facility (for a price) reflects their belief in Las Vegas Sands' strategy and the resumption of growth in Macau," he wrote in a client note.

He maintained an "Overweight" rating.

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The amendment gives the Las Vegas-based company six quarters of relief from some requirements of its debt agreements. Las Vegas Sands can also issue senior secured or unsecured notes in Macau.

Janet Brashear of Bernstein Research said that the amended facility gets rid of concerns over financial requirements related to the Macau credit agreement until at least the end of next year and possibly longer.

The cash-strapped casino operator, which has attempted to lower costs amid waning discretionary spending, is also considering a listing of a minority interest of its Macau operations on an Asian stock exchange.

Brashear said that the potential IPO or a private sale of some of the Macau assets could raise up to $1.8 billion and be put toward paying off Macau debt and for other purposes.

She increased Las Vegas Sands' price target to $12 from $10 and reaffirmed an "Outperform" rating.

Shares of Las Vegas Sands shed 68 cents, or 5 percent, to $13.11 in morning trading as the broader market dropped while investors worried about flat consumer prices. The stock has traded in a 52-week range of $1.38 to $59.17.

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